The present invention generally concerns systems and methods for determining the cost of a securities research department to service a client of the department.
In the equities research industry, an equity research department generates intellectual property (research) that is provided or shared with a number of different parties. For example, the IP may be provided to portfolio managers of so-called “buy-side firms,” i.e., institutional investors such as mutual funds, hedge funds, pension funds, etc. Also, the IP may be shared with, for example, the CEOs and CFOs of corporate clients. In addition, where the equities department is a department of a large brokerage or investment house, the IP may be shared with other constituents of the firm, such as traders, analysts, investment bankers, etc. Because the research is distributed to so many different parties, it is difficult to match budget items of the equity research department (which are mostly fixed costs) to revenues of the department.
Further complicating the ability to allocate costs of an equity research department to clients or other consumers of the equity research is the fact that the IP is distributed and consumed through many different channels. For example, the work product produced by an equity research department may comprise written publications (electronic or hardcopy), tailored or blast emails and voicemails, one-to-one meetings, conferences, seminars, corporate events, etc. The distribution and consumption channels for these various forms of work product vary. Therefore, it is difficult to track the production of these various forms of work product, as well as to track consumption of the work product. Accordingly, there exists a need for a technique by which an equity research department can track or determine the costs of servicing a client of the firm.